Friday, July 18, 2008

Offshore drilling - Garrett proves that he just doesn't get it.

It isn?t exactly news anymore when Scott Garrett is the only NJ republican House member to vote a certain way. While it shows his stunning ability to be out of step with his own party (and not in a good way, since he is more to the right than most party members at a time when the republican party is more and more at odds with what Americans want), there are certain times when his lone vote shows an even more stunning lack of ability to grasp the big picture.

Offshore drilling is yet another one of those times.

Just recently, Garrett voted in favor of not one but two bills that would ?solve? America?s oil dependency by?.drilling for more oil, just here in the United States. Not only is this a bad idea from a short to mid term standpoint, but it is also a bad idea from a long term standpoint, as it (1) won?t lower gas prices in any material way and (2) won?t address the big picture need of becoming energy independent over the long term.

As far as the overall timeframe and impact, one of the more common timeframes that has been thrown around is that it would take 10 years before we hit a high level of production and there would be a potential 3% drop in prices on a per-barrel basis:

According to the NYT, the Energy Information Agency estimates that the total amount of oil in the offshore zone in question is about 16 billion barrels. If we assume that it would take about ten years from the day of authorization to get to peak production and that most of the oil is pumped out over 30 years, this would translate into a bit over 1 million barrels of oil a day.

That would be equal to about 1 percent of world production in a decade. If we assume a long-run demand elasticity of 0.3, this would imply a drop in world prices of approximately 3 percent. In today's prices, we would be looking at a drop in the price of a barrel of oil from around $135 to $131. If this were passed on one to one in gas prices (this is long-run story), we might expect to see a drop in the price of a gallon of gas from around $4.00 to around $3.92 a gallon.

But this isn?t really even the point, even though it demonstrates that (1) we can?t drill our way out of the current crisis, and (2) even if we can, we won?t see a big benefit even if everything runs as smoothly as one can hope. Put another way, the offshore drilling won?t reduce prices in the short term and won?t likely even materially reduce prices in the long term.

The larger issue here, of course, is energy independence in general, as well as the environmental impact of our choice in energy policy. And here is where Garrett is either clueless or doesn?t really care about the needs of his constituents when it comes to solving the short term and long term energy crisis.

Not that this lets other republicans who oppose drilling off their particular state coast but are all for drilling elsewhere off the hook ? as the ?NIMBY? argument is only a selfish one. Either you are in favor of more drilling or you are not. Either you are in favor of solving America?s oil addiction with more oil or you are not. Either you are for new initiatives in order to achieve energy independence and lower overall energy costs as well as help the environment or you are not. Either you are for more environmental pollution from oil and ?clean coal? (and by the way, coal is coal and is dirty no matter how ?clean? you want to try and call it) or you are not.

Either you get it, or you don?t (or you do but choose not to care).

By focusing on more oil and more refineries and more drilling, it is clear what Scott Garrett?s priorities are. And they are not with the short, mid range or long term interests of the people of New Jersey?s fifth district.

It is only with investment and focus on alternative energy sources and renewable energy initiatives that can save people money in the short term and help families transition to the use of hybrid cars, energy saving appliances, wind or solar energy sources and other similar ?out of the box? thinking that will help people save money in the short term as well as make changes that will be beneficial in the long run.

If Garrett can not or will not see this major pressing need, even when the other NJ republicans see it, then it makes you wonder whether he is fit to serve his constituents.

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